1. Financial Management
What you need to know…

2. Agenda Introductions Webinar logistics Financial management systems
Uniform guidance – ‘Super circular’
Accounting system
Policies and procedures
Fiscal reporting
Requirements for cash reimbursement requests
Preparing for fiscal site visits
Common IG audit findings
Member support costs and grant drawdown
Administrative costs
Close outs
Program income

3. Your Fiscal Team July Afable, Manager of Accounting & Finance
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Steve Gallucci and Steve Burke
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4. Financial Mgmt. Systems
Code of Federal Regulations
Title 2-Grants and
Uniform guidance – Super circular
Key characteristics of highly effective financial management systems
Required policies and procedures
Suggested policies and procedures
Policies and procedures and Form 990
Electronic storage
Record Retention Part

5. OMB Uniform Guidance – Super Circular
Code of Federal Title 2-Grants and Agreements (Revised January 1, 2017)
Supersedes and streamlines OMB Circulars:
A-21 A-110
A-87 A-122
A-89 A-102
A A-50 (specific sections)
Effective date: all federal awards made on or after this date
Raises Single Audit threshold to $750,000 from $500,000 – for years ending or after
Under Title 2 there are two Subtitles:
Subtitle A-OMB Guidance for Grants and Agreements
Subtitle B-OMB Regulations for Grants and Agreements
We’ll be focusing on Subtitle A under which there are two Chapters:
Chapter I-OMB Government wide Guidance for Grants and Agreements
Chapter II-Office of Management and Budget Guidance
The following highlights some, but not all, of the important changes from past OMB Circulars. This list is not exhaustive and is not a substitute for reading and understanding the Uniform Guidance.
§ Conflict of Interest. Requires non-federal entities (recipients and sub-recipients) to disclose, in writing, potential conflicts of interest. This has been added to Grant Terms and Conditions.
§ Mandatory Disclosures. Requires non-federal entities to disclose, in writing, any violations of criminal law. Non-federal entities should review this section to ensure they understand their reporting obligations.
§ Internal Controls. Requires non-federal entities to establish and maintain effective internal controls over the award and ensure that the non-federal entity is managing the award in compliance with applicable federal statutes, regulations, and the terms and conditions of the award.
§§ Contracts must be procured in accordance with the procurement requirements in 2 CFR Part 200. Alternatively, nonprofit organizations and institutions of higher education may continue to comply with the Procurement Standards in OMB Circular A-110 for one additional fiscal year beginning after December 26, Such election must be specified in the non-federal entity’s documented policies and procedures.
§ Requirements for pass-through entities. Delineates the roles and responsibilities of those non-federal entities that further subaward federal funds.
§ Indirect Cost. Allows non-federal entities who have never had a negotiated indirect cost rate to utilize a de minimis indirect cost of 10% of Modified Total Direct Costs. Additionally, non-federal entities that do have an indirect cost rate may elect a one-time extension of their current indirect cost rate for up to four years. Guidance on how to select and calculate the de minimis rate will be published via application instructions and eGrants account maintenance directives. Note: The impact of § on indirect/administrative costs budgeted for AmeriCorps State and National programs is different than for other programs. AmeriCorps State and National programs should continue to follow application instruction guidance for calculating indirect costs/administrative costs (e.g., if opting for the fixed percentage method for indirect/administrative costs have a 5 percent maximum federal share and grantee match for administrative costs up to 10 percent of the sum of Sections I and II).
§ Audit Requirements. Raises the single audit threshold to $750,000; therefore, some non-federal entities that were required to conduct an A-133 audit in the past will no longer be required to do so. These non-federal entities will now be monitored under CNCS’s standard operating procedures for organizations that fall below the threshold.

6. OMB Uniform Guidance – Super Circular
For today’s training we’ll focus on Chapter II-Office of Management and Budget Guidance
Chapter II-Office of Management and Budget Guidance has 299 Parts:
Part-200-Uniform administrative requirements, cost principles, and audit requirements for Federal awards
Part Reserved {per CFR}
Part 200 has six (6) Subparts as follows:
Subpart A-Acronyms and Definitions {100 Sections}
Subpart B-General Provisions {14 Sections}
Subpart C-Pre-Federal Award Requirements and Contents of Federal Awards {14 Sections}
Subpart D-Post Federal Award Requirements {46 Sections}
Subpart E-Cost Principles {76 Sections}
Subpart F-Audit Requirements {21 Sections}

7. OMB Uniform Guidance – Super Circular
Focusing on “Post Federal Award Requirements under Subpart D-Sections Standards for Financial and Program Management:
Some sections to cover:
Financial Management
The financial management system of each non-federal entity must provide for the following:
(1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which there were received.
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirement set forth in Financial reporting and Monitoring and reporting program performance

8. OMB Uniform Guidance – Super Circular
(3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation
(4)Effective control over and accountability for, all funds, property, and other assets. The non-federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes.
(5) Comparison of expenditures with budgeted amounts for each Federal award
(6) Written procedures to implement the requirement of payments. Time lapse of funding and expenditures

9. OMB Uniform Guidance – Super Circular
(7) Written procedures for determining the allowable costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal awards

10. OMB Uniform Guidance – Super Circular
Section: Internal Controls
To establish and maintain effective Internal Controls over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. This includes adequate responses to audit findings and protection of personal information. Note Massachusetts reg.’s on protection of personal information reg.’s 201 CMR 17}
These internal controls should be in compliance with guidance in ‘‘Standards for Internal Control in the Federal Government’’ (the Green Book) issued by the Comptroller General of the United States and the ‘‘Internal Control Integrated Framework’’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

11. OMB Uniform Guidance – Super Circular
Section: % Rule-Cumulative cost transfers that exceed or are expected to exceed 10% of the total budget as last approved by the Federal awarding agency. Note MSA’s 2% rule as well
Section: speaks to requirements for pass-thru entities and also speaks to sub-recipient requirements
Section: speaks to record retention and access

12. OMB Uniform Guidance – Super Circular
Section: speaks to remedies for non compliance with Federal Reg.’s
Section: speaks to direct and indirect costs and Indirect Cost Rates
Section: are General Provisions for Selected Items of Costs, i.e. Alcoholic beverages, and conference costs

13. OMB Uniform Guidance - Super Circular
Note under the Indirect Cost Rate Sections:
New Requirement to Record Your Indirect Cost Rate in eGrants
Recipients must record the indirect cost rate method and rates which they will be using on their awards
Use this link to access instructions on how to record your rate in eGrants
There's also a handout with instructions on how to get rates into eGrants.

14. Accounting System
In order to meet the CNCS reporting standards {Section }
Your Accounting System must be capable of:
Identification in your accounts of all federal awards received and expenditures and identifying the federal program under which funds were paid and received.
Distinguishing grant versus non-grant related expenditures
Identifying costs by program year
Identifying costs by budget category (chart of accounts) and the timely comparison of actual vs budget
Differentiating between direct and indirect costs (administrative costs)
A system/process that tracks non-reimbursable costs that must not be charged to any federal grant
A system/process that provides adequate support for all funds requests to avoid improper payment findings
Grant and non-grant expenditures can be controlled via the customer/job field in QuickBooks.
Direct and indirect costs can be captured in the class field of QuickBooks.

15. Accounting System (cont.)
Accounts for each award/grant separately
Maintains Federal/non-Federal matching funds {Chapter } separately from grant funds
Examples, State Funding and/or Volunteer Services
Records in-kind contribution (which can be match funding) as both revenues and expenses
Directly correlates to financial reports submitted to MSA, including Periodic Expense Report (PER)
As note on prior slide, Questioned Costs:
Costs in violation of Reg.’s
Costs not supported by adequate documentation
Costs that are unreasonable ..”prudent person test”
Written and followed polices and procedures
Qualified and trained financial staff
Effective communication between levels within finance department and between finance department and program department
Cross training
Succession planning
Self assessment, continuous improvement
Board and Finance Committee
Active, knowledgeable, informed
At a minimum, need a finance person on Finance Committee

16. Policies and Procedures
Internal controls are emphasized in Uniform Guidance, and are part of our site visit.
Description of transactions, especially training, is important.
Consider prohibited transactions as well.
See handouts

17. Policies and Procedures
For cash draws, internal controls should ensure you are requesting the proper amount.
For financial statements, policies should state what’s included and frequency of preparation.

18. Policies and Procedures and Form 990

19. Electronic Storage

20. Electronic Storage

21. Electronic Storage

22. Electronic Storage from Uniform Guidance
§    Methods for collection, transmission and storage of information.
In accordance with the May 2013 Executive Order on Making Open and Machine Readable the New Default for Government Information, the Federal awarding agency and the non-Federal entity should, whenever practicable, collect, transmit, and store Federal award-related information in open and machine readable formats rather than in closed formats or on paper. The Federal awarding agency or pass-through entity must always provide or accept paper versions of Federal award-related information to and from the non-Federal entity upon request. If paper copies are submitted, the Federal awarding agency or pass-through entity must not require more than an original and two copies. When original records are electronic and cannot be altered, there is no need to create and retain paper copies. When original records are paper, electronic versions may be substituted through the use of duplication or other forms of electronic media provided that they are subject to periodic quality control reviews, provide reasonable safeguards against alteration, and remain readable.
No longer will require original signature page

23. Fiscal Reporting Quarterly Due Dates
October 14, 2017 (16-17 AND through Sept. 30)
January 13 (through December 31)
April 14 (through March 31)
July 14 (through June 30)
October 13, 2018 (17-18 AND through Sept. 30)
PER Excel document with individual worksheets updated through the required date
Reports must be sent in by the due dates, no exceptions
MSA also is required to file reports with CNCS
Note that TWO separate reports are due in October
If program ends before September do not include those expenses on new report – they should only be on the report
The report is simply an ed version of the PER document with all individual PERs through the required date

24. Reimbursement and Reporting Key Terms & Definitions
Cover Sheet/Request for Cash Reimbursement Cover Page
Budget Summary Worksheet
Periodic Expense Report (PER)
Backup/Supporting Documentation
General ledger report that clearly supports PER
Actual documentation acceptable if there are only a few transactions
Federal Financial Report (FFR)
MSA submits this report, aggregating information from the PERS; 30 days after end of reporting period, and 90 days after annual reporting
PER is the individual report for the period as well as what we call the whole excel document
Backup/supporting documentation – usually a general ledger is best
Note that FFRs are required from sub grantees as part of periodic closeouts.

25. Reimbursement Request Process
At least quarterly
At minimum, request funds 30 days after submission of PER (except for July 15)
Encouraged to request more frequently
Payments made via check or electronic fund transfer (EFT)
EFT requires small transaction fee deducted from reimbursement
Contact July to discuss/choose EFT
Must be within 30 days – except July which must include the report AND request together

26. Reimbursement Request Process
Accurate reimbursement received by the 15th processed by the 30th; received by the 30th processed by the 15th
Inaccurate reimbursements returned by PO for revision and will be resubmitted for processing in the next reimbursement cycle
MSA adheres to 15 day processing timeline to account for staff capacity, time off, etc.
MSA does not advance funds
Note the turnaround time – we may be able to process faster than 15 days, but this is the maximum time.
Inaccurate/incomplete reimbursements will not be considered “submitted” until they are accurate/complete and therefore may delay payment timeline

27. Reimbursement Request Documents
Complete reimbursement request includes (electronic okay):
Cover sheet with signature
Budget summary worksheet and the individual tab with expenses for the period
PER for current request (excel document)
General ledger, reconciliation report, other backup documentation
Individual member hours to date/hours tracking document
Your PO will send the PER and the hours tracking document templates at the beginning of the year
Reimbursements will not be processed until all components are received
Do not retroactively change individual PERs after reimbursement was paid
PD signature/initials is their explicit confirmation that the employee hours were worked. Remember that we need member tally logs electronically, and your PO will be checking to make sure hour requirements are being met.
PO’s will not submit requests for processing until all materials – including member hour updates – are received
Given our capacity and the multiple programs we are supporting at once we cannot be responsible for tracking down their missing/un-submitted items
The requests could be submitted electronically.
In addition to indicating and signing off the number of hours on the cover page, they need to submit an actual member hour tally for the period.
In case of staff turnover, it’s the sub grantee's responsibility to train new staff on these requirements. However, we will be happy to help answer questions so that the workflow continues.
We’ll be paying to attention to how programs are staying on track with matching funds this year. 
Finance and the PO will monitor reimbursements, and will contact you if the grant funds and match funds off by more than 10%.  We’ll want to know whether there are issues with the match funds and what adjustments may be necessary.
If new information comes to light, file a supplemental PER.

28. COVER SHEET All fields in the cover sheet are linked to the PER.
Make sure you change the reimbursement period!

29. Budget Summary

30. PER

31. Supporting Documentation
We need a summary that ties this up to the GL

32. Fiscal Site Visits Purpose FSV is not an audit
MSA is responsible for ensuring the fiscal integrity of organizations funded
Ensure proper internal controls, systems and safeguards exist around the financial operations of an AmeriCorps program
FSV is not an audit
We review current systems and make recommendations on how to strengthen the systems
Limited transaction testing – randomly chosen reimbursement request.
FSV 1/3 of portfolio each year
Goal is to have each sub grantee have one FSV in a three year cycle
May be more often if-
we identify issues
need for training

33. Fiscal Site Visits (cont.)
Includes, but not limited to:
Review of organization's internal control structure
Review of prior audit reports and management letters
Review of progress made from any prior audit and management letter finding(s)
Review of recent request for reimbursement including all support documentation
Grant and match

34. Fiscal Site Visits (cont.)
Likely areas for review
Member benefits
Living allowance stipends
Cash match
Committed
Collected
In kind contributions
Insurance
Human resources/payroll documentation
Is healthcare offered, and are there signed waivers?
Are taxes properly withheld from stipends?

35. Fiscal Site Visits (cont.)
Likely areas for review (cont.)
Financial policies and procedures
Cost allocations
Program analysis
Actual vs. Budget reports
Program documentation – signed contract and provisions
Staff charged to grant
I-9
W-4
Timesheets
Current wage authorization
Appropriate job description
Current personnel evaluation
This is a key characteristic of a highly effective financial management system
Wage changes must be documented in the employee’s files.
We need to look at both member and employee timesheets – no allocation of members.

36. Fiscal Site Visits (cont.)
Recurring Fiscal Findings
Staff Files
Incomplete or missing I-9s
Missing job descriptions or contracts
Missing properly completed payroll authorization forms
Timesheets
Missing
Staff and member timesheets missing supervisory signoff
Electronic timesheet systems that were not compliant
Timesheets must show not only total time, but must provide a breakout of the allocations to each grant.

37. Member Support Costs According to the AC Provisions
Regardless of member type:
Stipends are not determined by the number of hours served, it’s a flat rate
Stipends can only be paid while a member is serving
Timesheets properly completed
Signed by supervisor and member
Service, training and fundraising hours segregated

38. Member Support Costs (cont.)
Guidance from CNCS
A member stipend stays the same for the duration of their service
All members with the same position description must be paid identical stipends and receive the same benefits – travel, training
Member stipends can not be pro-rated
If a member starts late, the stipend cannot be increased
Member stipends can not be paid in lump sums
If members are suspended through a whole pay period they are not eligible for that stipend
Members cannot perform other work for the organization
There are specific provisions for employees starting late. Work with your PO!

39. Grant Drawdown
Commissions and AmeriCorps Programs sometimes do not spend all of their Federal money each year.
Most of the unexpended funds are from Section II Member Support Costs and other costs associated with members (Health care, trainings, travel).
Contact us early on – we’d like to work with you!

40. Grant Drawdown (cont.) Section I – Program Costs
Reconcile budgeted amount with year to date expenses
Forecast projected expenditures
File amendment with Program Officer
Section II – Member Costs
Start program year with full enrollment
Fill slots vacated by members who served less than 30% of their hours
Convert Member Slots – FT to PT
Specific rules for slot conversions and filling vacated slots - Work with your PO!

41. Grant Drawdown (cont.) Budget Amendments
Contact your AmeriCorps Program Officer before initiating a budget amendment
The sooner you contact us, the more likely we can help
Amendments over 10% take longer to process
All provisions still apply to budget amendments
Include justification with budget amendment
Your PO can provide assistance.
Budget amendments are subject to review
Budget amendments can be rejected

42. Code of Federal Regulations-Two Definitions
Unliquidated Obligations
For financial reports prepared on a cash basis, obligations incurred by the non-federal entity that have not been paid (liquidated). For reports prepared on an accrual basis, these are obligations incurred by the non-federal entity for which an expenditure has not been recorded.
Unobligated Balance
The amount of funds under a Federal award that the non-federal entity has not obligated. The amount is computed by subtracting the cumulative amount of the non-Federal entity’s unliquidated obligations and the expenditures of funds under the Federal award from the cumulative amount of the funds that the Federal awarding agency or pass-thru entity authorized the non-Federal entity to obligate.

43. Section III: Admin. Costs
A fixed percentage of Section I + Section II designed for administrative costs
Composed of
Corporation Fixed Amount (this is yours)
Commission Fixed Amount (this is MSA’s) 2%
Allows MSA to provide training and support.
The only way to draw down all of Section III is to draw down all of Section I and Section II

44. Section III - Calculations
This was updated in January 2017 by CNCS.
Our fee comes out before the funds are given to you. No need to calculate.

45. Grant Close Out Process
MSA checks total funds drawn down in the PMS for program and compares to final program FFR/PER
MSA sends close out letter/instructions with forms to programs and amounts drawn down
Program completes forms and reconciles its ‘total draw down with MSA’s amount provided
Program submits documentation to MSA within 30 days
MSA aggregates all programs and submits one package to CNCS
MSA must submit all required financial, performance and equipment reports within ninety calendar days of the completion of the award.
A grant is officially closed by CNCS out when all applicable administrative actions and all required work of the Federal awards have been completed, i.e. the end of the performance period
MSA may ask for periodic closeouts during the program.
This process at CNCS documents:
Total Funds drawn down
Sub-grantee certification
Residual equipment & supply inventory
Refunds as necessary
Usually due to variances between accrued and actual expenses.
The process usually take 6-9 months

46. Program Income Definition
Revenue earned as a direct result of activities funded under the grant
Program income must be used for the purposes of the grant incurred during the project period
Program income on hand must be used to defray eligible program costs before requesting funds
Discuss with PO if you have program income